“By 2014, interest payments on Ireland’s
public debt (then 120pc of GDP) will be €10bn,
while tax revenues will be €36bn. This ratio is
well above the average default trigger of 22pc, as calculated
in a Moody’s study.” [Quoted from telegraph.co.uk]

“Sinn Féin is considering a legal challenge
to the Government's decision not to put the EU/IMF bailout
deal to a Dáil vote.

“The party said that the Government is acting
unconstitutionally in its failure to allow TDs to have
their say on the deal.

“Sinn Féin President Gerry Adams said:
"Any new government should refuse to honour the
terms of the IMF/EU deal and Sinn Féin will seek
a mandate in the General Election to renegotiate it.

“ "This Government has no mandate to impose
the terrible deal it has negotiated with the IMF and
EU." ” [Quoted from examiner.ie]

“Cowan has resisted calls for his resignation,
but he may soon have to face a “no confidence”
vote....” [Quoted from investorplace.com]

“Far from being immunised against the "contagion",
other economies are now coming under renewed attack.
Most worryingly, since the Irish deal investors have
started to dump Italian government debt even as the
sell-off of Greek, Irish, Spanish, Belgian and Portuguese
securities continues – a broad vote of no confidence
from the markets to European Union leaders.” [Quoted
from independent.co.uk]

any remaining power of the eussr central bank is based entirely
on bluff

It just requires one of the PIIGS
to stand firm, and the euro looks highly unstable.

“Ireland’s reluctance to accept a European
Union bailout has forced the ECB to step up its bond
purchases and lend more money to the country’s
banks. The danger, first raised by Weber in May, is
that the ECB erodes its independence by financing debt-strapped
nations and keeping banks on life support as Europe’s
debt crisis persists.

“ “If stress rises, the ECB will have to
jump in,” said Joerg Kraemer, chief economist
at Commerzbank AG in Frankfurt. “But the ECB does
not want to again become an active buyer of peripheral
debt or take a lot more risk onto its balance sheet.
Weber wanted to avoid exactly that.” ” [Quoted
from bloomberg.com]

“...Technically, deficits were to be regulated,
but in practice, and in the interests of not upsetting
any applecarts, they were not: otherwise, France and
Italy would have been booted out long ago...”
[Quoted from telegraph.co.uk]

For those who whine about David Cameron,
what would you do if you were a highly able politician
and you saw the EUSSR moving further and further into
cloud cuckoo land? What would you do?

Why waste political capital when it
may well be unnecessary?

“...If Ireland is to be bailed out, whether
by the ECB or the IMF, it will have to do what it is
told. And the ECB, as it eyes Portugal and Spain, and
continues to eye Greece, and worries about Italy, will
start to think that only complete sovietisation –
central control of economies from Frankfurt, with tax
rates, deficits and spending run by people who will
brook no dissent – can produce a sound, coherent,
European economy.” [Quoted from telegraph.co.uk]

Of course, Heffer misses the
real point as usual.

Ireland has fought for independence
for 800 years, and not with student marches. And I doubt
others will go quietly as they grasp the realities.

the dodgy, tottering euro - how international inter-bank loans work

Very crudely, A owes B owes C owes
A. If anyone in the circle cannot pay, for example C cannot
pay A, then A cannot pay B and B cannot pay C. This is
called systemic risk. The European
banks are linked in much
more complex circuits of this type. If you really want
to get into this more deeply, it will help if you acquaint
yourself a little with fractional
banking.

If the web of debt involved banks alone,
systemic contagion can be controlled by a central bank
feeding banks in trouble, using printing presses. The
politicians in that country cannot afford millions of
voters losing their money. So the politicians tend to
guarantee ‘small’ deposits of the masses.
(A crude form of insurance is usually paid by the banks
out of profits, but if the banking collapse becomes big
enough and dangerous enough, the insurance quickly runs
out.)

Because the banks know that the government
will have bail them out, they tend to take ever bigger
risks (this is called moral hazard.)

The alternative is for the government
to let a bank fail. But, of course, this still leaves
other banks; that are owed money by the bank that fails; holding the baby,
and generating a cascade of failures.

Now, the euro is a complete mess, one
might almost call it a piigs ear. There is no serious
supervision, the criteria that supposedly rule ECB decisions
have been widely ignored by governments throughout the
EUSSR.

So far, we have referred to the problem
of systemic inter-bank breakdown.
But because of the chaos in the euro structure, and to
gain competitive advantage, Ireland offered to back all
deposits of the Irish banks. (Remember, to a great extent,
banks are very heavily clients of national states/governments).
So the systemic banking risks spread their infection from
banking default to national government default.

To complicate matters still further,
banks work across borders. For example, large British
banks have funded huge cross-border loans, lending in
the region of £100 billion into Ireland. So if the
Irish government goes into default, Britain could find
itself another £100 billion short. The British state
has a very large interest in stopping Ireland and its
banks defaulting. That is what is behind the British government’s
offer to help Ireland out of its mess.

The ECB and the IMF, if they bail
out Ireland, will demand their pound of flesh in terms
of control over the Irish economy, and so over the Irish
state. After fighting for freedom for over 800 years,
this is not welcome.

But the ECB cannot afford to let Ireland
crash and burn. So here is the kicker: Ireland can sit
there, refusing to accept terms and the ECB has virtually
no choice but rescue them anyway, unconditionally.

And the moment that any of the PIIGS
decide to exercise this nuclear option, the euro will
be seen as the house of cards that it is.

“...there is now the chance to launch “a
new global currency issued by a global central bank”.”

That is, indeed, truly madness.

“The euro elite is utterly ruthless. In its
mission to save the euro, it is ready to throw tens
of millions out of work and in the process destroy businesses,
lives and whole economies. Consider the terrifying facts.
The Irish economy has gone through recession and entered
what economists call a depression. Its output contracted
by an extraordinary 10 per cent last year, and may well
do so again over the next 12 months.

“In Spain, unemployment stands at 20 per cent,
and youth unemployment a horrifying and tragic 40 per
cent. The depths of misery lying behind these statistics
cannot be exaggerated. A friend of mine who lives in
the Spanish province of Andalusia tells me that some
children in his village cannot go to school. This is
because their parents cannot afford to buy them shoes.
Effectively large parts of Europe are de-industrialising.
In Greece, the economy may contract by 15 per cent over
the next two years as a result of massive cuts in state
spending.”
—
“Last May, as the storm clouds gathered, Dominique
Strauss-Kahn, the former French finance minister who
is now managing director of the International Monetary
Fund, told a gathering of bankers that “crisis
is an opportunity”, adding that there is now the
chance to launch “a new global currency issued
by a global central bank”.

“This mad vision lies behind the decision to
build a vast new set of offices for the European Central
Bank in Frankfurt, which is due for completion in 2014.
It is virtually impossible for the eurozone to last
in its present form till then. If it does, its survival
will only come at the price of untold economic devastation.”

“As this continues into next year, with unemployment
stuck at depression levels or even creeping higher,
it starts to matter who has political “ownership”
over these policies. Is there full democratic consent,
or is this suffering being imposed by foreign over-lords
with an ideological aim? It does not take much imagination
to see what this is going to do to concord in Europe.

“My own view is that the EU became illegitimate
when it refused to accept the rejection of the European
Constitution by French and Dutch voters in 2005. There
can be no justification for reviving the text as the
Lisbon Treaty and ramming it through by parliamentary
procedure without referenda, in what amounted to an
authoritarian Putsch....”

“The September trade data show modest improvement,
although it is notable that the deficit still widened
overall in the third quarter. Specifically, the total
trade deficit narrowed to a four-month low of £4.6bn
in September from a five-year high of £4.9bn in
August.”

Who cares about ‘balance of payments’
deficits?

So Missus Sawkins buys a Chinese car?
She very likely borrows from a UK bank to pay it off..

The banks make a profit, the Chinese
get more noodles. Who loses?

Either Missus Sawkins can pay the debt
off, or otherwise.

Missus Sawkins got a car that suited
her better than the car from the overtaxed European
manufacturer. The banks make more profits, and the government
grabs more tax from everyone -

the banks,
the petrol Missus Sawkins puts in her new car,
the concessionaire who sold the car,
the wages Missus Sawkins uses to pay for the car,
the import tariffs,
and on and on and on...
Even the Lebanese shipping registration may be able
to buy more arms from Iran.

Clearly, the last government will not
care or they would not have been taxing the UK manufacturers
out of business.

If Missus Sawkins stops buying Chinese
cars, that will not produce more jobs in the UK. If all
the Missus Sawkins stop buying Chinese cars, then the
Chinese will stop eating noodles.

Of course, we could build an iron curtain
and stop Missus Sawkins buying what she wished.

Aat least then the cult socialists
would be happy.

Perhaps the Micronesians will buy some
Scotch whisky and sell some sushi to the Chinese, so at
least they won’t starve.